Better Place Drives Israel's First EV Rentals

Better Place, the Silicon Valley company founded in 2007 by former high-tech executive and Israel native Shai Agassi, reached an agreement with Israel's largest rental car company that will enable that country's first-ever electric vehicle rental program. Eldan Group, the rental company, will purchase "hundreds" of Renault Fluence Z.E. (above) electric vehicles from Better Place and then will rent them to the public in 2012, Better Place said in a statement Monday. In conjunction with the agreement, Eldan will provide a free service package for the EVs as well as monthly subscription and discounted daily rates for the EVs.

Eldan, which will start a marketing program throughout Israel to both the general public and to companies, will provide customers access to Better Place's battery-switching program. The Fluence EV features a lithium-ion battery pack that can be charged from the power grid but also is designed so a depleted pack can quickly be swapped for a fully charged pack at one of Better Place's battery-exchange stations. "The agreement with Eldan enhances Better Place's position in the Israeli market," Moshe Kaplinsky, CEO of Better Place Israel, said in the statement. "Eldan and Better Place will provide customers with a comprehensive service package, which will provide an exceptional driving experience. I am convinced that the expected demand from companies that have already expressed their commitment to switch to electric cars by signing agreements with us will be strong and I am pleased that Eldan has identified this market demand."

Soaring ValueThe agreement was announced about three weeks after Better Place said it raised another $200 million in equity financing from companies such as General Electric and UBS AG. Better Place said it would use the funds to expand its electric-vehicle battery swapping network throughout Western Europe and other parts of the world. The funding brought the company's total to almost $800 million in equity financing and almost doubled the company's valuation to $2.25 billion since its previous round of equity funding in January 2010.

Better Place is looking to promote the concept that motorists should be able to lease charged batteries and battery charging time so that buying an electric vehicle doesn't require them to also purchase a battery pack that could cost as much as the car. Like cell-phone buyers who buy minutes, or packets of air time, in prepaid monthly or annual packages tailored to fit their individual needs, Better Place customers would buy a car -- or, in Eldan's case, rent them -- and then purchase miles, in the form of kilowatt-hours of energy stored in battery packs that Better Place would supply.

The company in 2010 conducted the world's first commercial battery swap station for electric vehicles with three converted Nissan taxicabs in Tokyo. The cabs swapped out batteries every 50 miles or so, while the Better Place station performed the swap in about 60 seconds. Last year, the company also opened a demonstration center in Israel that gives visitors a chance to see how battery-switching stations work and to test drive electric cars around a one-mile track. In addition to Israel, Better Place said last month that it would also speed up the development of its battery-swapping stations in places such as California, Japan, Canada and southern China, and will start commercial service in Australia in mid-2012

Earlier this year, Better Place said that its program in Denmark will provide drivers of properly equipped electric cars unlimited access to home and public charging and freshly charged battery packs whenever needed for the equivalent of 399 euros ($543) a month. Coupled with partner Renault's announced pricing of its Fluence Z.E. swappable battery sedan at 27,496 euros (about $37,500) before any incentives -- a price that doesn't include the battery pack -- the program could save Danish EV drivers from 10 percent to 20 percent a year on total vehicle and fuel costs versus similarly sized and equipped gasoline cars, the company said in March. The electricity is included in the monthly fee.